2026 MCA-IV Results Demonstrate that Minnesota Needs to Implement Robust Systemic Supportive Reforms

Gerald W. Von Korff · October 31, 2026

Each year, the state of Minnesota publishes the “Minnesota Report Card” showing the proficiency rates of students at each traditional public and charter school. The report shows results for all students, and for students with various demographic characteristics, such as race, status as an English language learner, special education, lower income and homelessness. The theory behind the Report Card is that transparency and public pressure will cause the school districts with lower proficiency rates to take aggressive action. The Minnesota Report Card has existed in some form since 2014: the evidence demonstrates that transparency alone does not do the job.

This memorandum compares the proficiency rates of Black students in six Minnesota school districts and one exceptional charter school, Higher Ground Academy. The purpose is not to identify so-called good school districts and bad school districts, but rather to demonstrate, by comparing students with similar demographics, that better results are possible. The solution is not transparency alone, because that is not working. The solution is a combination of adequate funding, accountability for spending that funding on effective practices, and a robust state system of supportive non-punitive accountability.

SUMMARY

To illustrate the fact that implementing tactics to realize student potential can make a significant difference, we’ve focused on Minnesota Black students, because they are the largest non-white demographic. We have extracted from this group English language learners, so that the proficiency rates are not distorted by lack of full command of the English language. The data starkly illustrates a significant difference among the selected districts. Our purpose is to argue that we can do better, and that the state should be mobilizing a system of supportive accountability so that we are realizing the potential of these students.

Among Black students who are not English learners (non-EL), 2026 reading proficiency ranges from 15.5% in Minneapolis to 53.4% at Higher Ground Academy (HGA). That is more than a threefold difference across seven districts and charters. Adjusted for HGA’s very low special education rate, HGA’s figure would be about 48%, still the highest of the seven.

Rank	District	Black non-EL % proficient	Free/reduced-price meals
1	Higher Ground Academy (charter)	53.4%*	69.8%
2	Anoka-Hennepin	43.1%	36.6%
3	Osseo	30.5%	43.0%
4	St. Cloud	27.2%	66.7%
5	Hopkins	20.0%	37.0%
6	St. Paul	19.0%	64.5%
7	Minneapolis	15.5%	53.6%

* About 48% after adjusting for HGA’s low special education rate. See “Special Education Adjustment for HGA.”

Three findings stand out:

• Strong results are not only a charter phenomenon. Anoka-Hennepin, the state's largest traditional district, reaches 43.1% for Black non-EL students, second only to HGA. Yes, there may be other factors explaining these differences. This is not about blaming or finding an alibi: it’s about figuring out what needs to be done to address the needs of all students.
• The two central-city districts are at the bottom, with the widest gaps. St. Paul and Minneapolis have the highest White proficiency of the seven (69.1% and 74.2%) and the lowest Black non-EL proficiency. Their gaps between White and Black non-EL students are 50 and 59 points.
• Poverty matters but does not decide the outcome. Hopkins and Anoka-Hennepin have nearly identical poverty rates (37%) yet differ by 23 points. HGA and St. Cloud, two of the poorest, outperform four districts with less poverty.

The memo closes with three themes about how this information should be used: to learn from districts that do better and to identify districts that need more support; to recognize that publishing scores has not, by itself, produced improvement; and to build the system of supportive accountability that the Minnesota Constitution requires.

DEMOGRAPHICS AT A GLANCE

The seven differ widely in size, racial makeup and need. Figures are October 1, 2025 enrollment, all grades.

Race and ethnicity (% of enrollment)

District	Enrollment	White	Black	Hispanic	Asian	American Indian	Two or more
Anoka-Hennepin	38,336	53.5	17.6	7.4	11.6	3.2	6.6
St. Paul	32,750	22.4	24.1	14.5	27.6	3.5	7.9
Minneapolis	30,079	36.4	26.8	22.0	3.1	5.8	5.9
Osseo	21,385	36.3	27.8	10.4	15.8	2.3	7.5
St. Cloud	10,232	33.8	43.0	12.1	2.4	1.1	7.2
Hopkins	7,071	48.7	25.2	12.1	3.6	1.9	8.4
Higher Ground Academy	1,177	7.4	89.1	0.1	3.4	0.0	0.0

Other characteristics (% of enrollment)

District	Free/reduced-price meals	English learners	Special education	Homeless
Anoka-Hennepin	36.6	10.0	20.3	1.1
St. Paul	64.5	30.3	20.6	1.9
Minneapolis	53.6	21.9	19.1	5.5
Osseo	43.0	12.0	16.5	1.4
St. Cloud	66.7	23.5	24.9	2.0
Hopkins	37.0	9.6	19.7	0.9
Higher Ground Academy	69.8	51.5	2.1	0.0

The English-learner share of Black test-takers also varies: about 43–44% in St. Cloud and at HGA, 21% in St. Paul, and 12–15% in the other four. This difference warns that it is a mistake to compare Black proficiency rates without disaggregation.

COMPARISON

Source: Proficiency: Minnesota Report Card, 2026 Reading MCA-IV (Reading.xlsx). FRP: MDE enrollment file, October 1, 2025. HGA is shown before the special education adjustment.

In every district, removing English learners raises the Black rate, but by different amounts: 10 points in St. Cloud and 15 at HGA, where many Black students are English learners, and 2–4 points elsewhere.

TRENDS NOW VISIBLE

With seven districts, several patterns appear that four could not show. With this few districts they are suggestive, not statistically established.

Source: Minnesota Report Card, 2026 Reading MCA-IV (Reading.xlsx); FRP from MDE enrollment file, October 1, 2025. Gap = White minus Black non-EL, in points.

1. High White results do not necessarily carry Black students along. Minneapolis and St. Paul have the best White results and the worst Black non-EL results. Across the six districts, the White–Black non-EL gap rises almost in step with White proficiency (correlation 0.86). Anoka-Hennepin and St. Cloud have the smallest gaps, 16 and 22 points.
2. Poverty is only loosely related to the district differences. Across the six districts, the correlation between poverty and Black non-EL proficiency is about −0.45, and the outliers run both ways. Hopkins and Anoka-Hennepin have the same 37% poverty rate and are 23 points apart. St. Cloud has more poverty than Osseo, Hopkins or Minneapolis but scores above Hopkins and Minneapolis.
3. In three districts, there are very high rates of Black non-EL students scoring at the lowest level (Beginning). The share at Beginning is 63% in Minneapolis, 62% in St. Paul and 56% in Hopkins, against 29% in Anoka-Hennepin and 19% at HGA.
4. Black English learners do poorly almost everywhere, with two exceptions. They are 4–7% proficient in five districts. Anoka-Hennepin reaches 12.8% and HGA 19.1%, the same two systems that lead for Black non-EL students.
5. Minneapolis has the highest homelessness rate (5.5%) and the lowest Black result. Homelessness, like poverty, may play a role.

ANOKA-HENNEPIN (ISD 11)

Black non-EL students are 43.1% proficient, the best result among traditional districts and only 16 points behind White students in the district. Just 28.6% score at the Beginning level.

Student group	Tested	% proficient	% Beginning
All students	18,926	50.6%	24.5%
White	10,249	59.2%	18.5%
Black, all	3,216	38.7%	33.9%
Black, not EL	2,741	43.1%	28.6%
Black EL (derived)	475	12.8%	64.6%

The state's largest district: 38,336 students, 53.5% White and 17.6% Black, with 36.6% free/reduced-price meals, 10.0% English learners, 20.3% special education and 1.1% homeless. Its Black students make up a smaller share of enrollment than in most of the others, and its poverty is among the lowest. Even so, Hopkins has the same poverty rate and gets far lower results. Again, the goal is not to blame, but to recognize that some districts need more support (and more accountability measures) than others.

OSSEO (ISD 279)

Black non-EL students are 30.5% proficient, third of the seven, and 34 points behind White students (64.4%).

Student group	Tested	% proficient	% Beginning
All students	10,253	44.3%	31.3%
White	3,844	64.4%	14.2%
Black, all	2,738	27.6%	47.1%
Black, not EL	2,403	30.5%	43.7%
Black EL (derived)	335	6.9%	71.3%

An inner-ring suburban district of 21,385 students: 36.3% White, 27.8% Black and 15.8% Asian, with 43.0% free/reduced-price meals, 12.0% English learners, 16.5% special education and 1.4% homeless. Only 12% of its Black test-takers are English learners, the lowest share of the seven.

ST. CLOUD (ISD 742)

Black non-EL students are 27.2% proficient, fourth of the seven, and 22 points behind White students (48.9%), the second-smallest gap.

Student group	Tested	% proficient	% Beginning
All students	4,315	30.5%	47.3%
White	1,447	48.9%	27.9%
Black, all	1,778	17.5%	60.8%
Black, not EL	1,021	27.2%	47.1%
Black EL (derived)	757	4.4%	79.3%

It has 10,232 students: 43.0% Black and 33.8% White, with 66.7% free/reduced-price meals, 23.5% English learners, 24.9% special education and 2.0% homeless. St. Cloud has the highest special education rate of the seven and the second-highest poverty rate. About 43% of its Black test-takers are English learners, so its all-Black figure (17.5%) understates how its Black non-EL students are doing. Its gap is small partly because its White students score lower than White students in the other districts.

HOPKINS (ISD 270)

Black non-EL students are 20.0% proficient, fifth of the seven, despite one of the lowest poverty rates. White students are 64.2% proficient, a gap of 44 points.

Student group	Tested	% proficient	% Beginning
All students	3,222	45.8%	33.2%
White	1,641	64.2%	16.7%
Black, all	717	18.0%	59.0%
Black, not EL	610	20.0%	55.9%
Black EL (derived)	107	6.5%	76.6%

Hopkins has 7,071 students: 48.7% White and 25.2% Black, with 37.0% free/reduced-price meals, 9.6% English learners, 19.7% special education and 0.9% homeless. Hopkins is the clearest case against a poverty-only explanation: it has the same poverty rate as Anoka-Hennepin and less than half its Black non-EL proficiency.

ST. PAUL (ISD 625)

Black non-EL students are 19.0% proficient, sixth of the seven. White students are 69.1% proficient, a gap of 50 points.

Student group	Tested	% proficient	% Beginning
All students	14,165	33.5%	45.8%
White	3,251	69.1%	15.3%
Black, all	3,234	16.5%	65.0%
Black, not EL	2,543	19.0%	61.5%
Black EL (derived)	691	7.1%	78.0%

St. Paul has 32,750 students: 27.6% Asian, 24.1% Black, 22.4% White and 14.5% Hispanic, with 64.5% free/reduced-price meals, 30.3% English learners (the highest of the six districts), 20.6% special education and 1.9% homeless. About 21% of its Black test-takers are English learners.

MINNEAPOLIS (SSD 1)

Black non-EL students are 15.5% proficient, the lowest of the seven. White students are 74.2% proficient, the highest White result, which makes Minneapolis's 59-point gap the widest.

Student group	Tested	% proficient	% Beginning
All students	13,129	41.3%	42.7%
White	5,196	74.2%	11.6%
Black, all	3,148	13.9%	66.2%
Black, not EL	2,665	15.5%	63.4%
Black EL (derived)	483	4.8%	81.8%

Minneapolis has 30,079 students: 36.4% White, 26.8% Black, 22.0% Hispanic and 5.8% American Indian, with 53.6% free/reduced-price meals, 21.9% English learners, 19.1% special education and 5.5% homeless, the highest homelessness rate of the seven. Only 15% of its Black test-takers are English learners, so English learners do not explain its results. Its district-wide poverty rate is mid-range, though that average hides large differences between its schools.

HIGHER GROUND ACADEMY (CHARTER 4027)

Black non-EL students are 53.4% proficient, the best of the seven. Adjusted for HGA’s low special education rate, the figure would be about 48%, still the best (see below). Only 18.5% score at the Beginning level.

Student group	Tested	% proficient	% Beginning
All students	618	36.6%	35.6%
Black, all	581	38.2%	32.5%
Black, not EL	324	53.4%	18.5%
Black EL (derived)	257	19.1%	50.2%
White	29	6.9%	86.2%

HGA has 1,177 students: 89.1% Black, 7.4% White and 3.4% Asian, with 69.8% free/reduced-price meals (the highest of the seven), 51.5% English learners, 2.1% special education and no homeless students reported. About 44% of its Black test-takers are English learners, and even they are 19.1% proficient. Two cautions:

• Special education. HGA’s 2.1% rate is far below the districts’ 16–25%. Students with disabilities usually score lower. Adjusting for this lowers HGA’s Black non-EL rate by an estimated 5 points, to about 48%.
• White students. Only 29 were tested. They may be East African or Middle Eastern students whom federal categories classify as White, but the number is too small to interpret.

SPECIAL EDUCATION ADJUSTMENT FOR HGA

HGA’s special education rate (2.1%) is far below the other six (16.5–24.9%). Because students in special education usually score lower, part of HGA’s Black non-EL result may reflect having fewer of them. Statewide figures for Black students allow a rough estimate of how much.

Black students statewide	Tested	Proficient	% proficient
All Black students	50,791	14,613	28.8%
Not in special education	42,946	13,982	32.6%
In special education (derived)	7,845	631	8.0%
Not EL (for reference)	39,119	13,296	34.0%

Source: Minnesota Report Card, 2026 Reading MCA-IV, statewide (Reading.xlsx). Special education row derived by subtracting the not-special-education counts from the all-Black counts.

Statewide, 15.4% of Black MCA test-takers are in special education, and they score about 25 points below other Black students. Proficiency for Black students who are neither English learners nor in special education is not published. The estimate therefore assumes HGA’s Black non-EL test-takers have its school-wide special education rate (2.1%) and asks what HGA’s result would be if 15.4% of them were in special education instead. The answer depends on how HGA’s special education students would score:

• At the statewide Black special education rate (8.0%): HGA would be 47.2%, a reduction of 6.2 points. This assumes HGA adds nothing for these students.
• In the same proportion to other students as statewide (about one-quarter of HGA’s level, or 13%): HGA would be 48.0%, a reduction of 5.4 points. This is the central estimate.
• Twenty-five points below HGA’s other students, the statewide gap (about 29%): HGA would be 50.1%, a reduction of 3.3 points.

Using a 12% or 20% special education share instead of 15.4% moves the reduction to between about 2 and 8 points. This memo uses about 5 points, which puts HGA’s Black non-EL rate at about 48%. HGA’s lead over Anoka-Hennepin narrows from 10 points to about 5.

Even adjusted, HGA’s result is high, especially for a school where 69.8% of students qualify for free or reduced-price meals, the highest rate of the seven. About 48% is 14 points above Black non-EL students statewide (34.0%), 21 and 29 points above St. Cloud and St. Paul, whose poverty rates are nearly as high, and about equal to the statewide rate for all students (48.2%).

Several cautions apply:

• Alternate test. Students with the most significant disabilities take the MTAS and are not counted in MCA results. That is why the 15.4% test-taker share is below district enrollment rates, and why the estimate uses the test-taker share.
• Identification. If HGA identifies fewer students rather than enrolling fewer students with disabilities, its unidentified students are already in its 53.4%, and the true adjustment is smaller.
• Other districts. The other six are not adjusted. Their special education rates are close enough to typical that the change would be small; St. Cloud, at 24.9%, would gain a point or two.

CONCLUSIONS

1. Language acquisition does not completely explain differences. Removing English learners raises Black proficiency everywhere, but the ranking barely changes and the spread between districts stays at 38 points (33 with HGA adjusted).
2. Neither poverty nor charter status completely explains differences. The two best results come from a high-poverty charter (HGA) and a low-poverty traditional district (Anoka-Hennepin). Hopkins, with Anoka-Hennepin's poverty rate, is near the bottom.
3. What districts do appears to matter a great deal. Black non-EL students with broadly similar circumstances reach 43–48% proficiency in two systems (HGA adjusted for special education) and 15–20% in three others. That supports a multi-lever reform agenda focused on instruction, curriculum, time and expectations, not desegregation or funding alone.
4. The central cities exhibit relatively high White proficiency rates. Minneapolis and St. Paul serve White students very well and Black non-EL students worst of all. That points to how those districts serve Black students, not to an overall lack of capacity.
5. HGA remains a strong example, with caveats. Adjusting for its low special education rate lowers its Black non-EL result by about 5 points, to about 48%. That is still the best of the seven and high for a school where 70% of students are low-income. Charter self-selection may account for part of the remaining advantage. Anoka-Hennepin’s result shows that strong outcomes for Black students are achievable in a large traditional district.

WHAT THIS INFORMATION SHOULD BE USED FOR

Beyond the findings above, these comparisons raise three broader themes.

1. The statistics answer two questions: First, they identify districts that seem to be doing better with students who come to school with educational disadvantages, such as Anoka-Hennepin and HGA here. We can then ask what those districts are doing that works. Even those districts may not be reaching their full potential, but they point to the conclusion that there is potential to do better. Second, they identify districts whose students need additional support and additional resources, such as Minneapolis, St. Paul and Hopkins. Both uses look forward. Neither treats the numbers as a final grade.
2. Transparency has not produced adequate improvement. The theory behind publishing proficiency scores is that transparency is an engine of improvement: once parents, voters and school boards see the results, districts will change. That theory is not validated. Minnesota has published proficiency results by district and student group for years, and differences like those in this memo have remained persistently the same.
3. These results should trigger systemic, supportive accountability. The better results in some districts suggest that most Minnesota districts can do better with students who come to school with educational disadvantages. There must therefore be a system that provides districts the resources to improve dramatically what they are doing. Identifying a district’s results as inadequate should begin a process of support, not end with a published score.

This is a constitutional obligation, not only a policy choice. Article XIII, Section 1 of the Minnesota Constitution makes it “the duty of the legislature to establish a general and uniform system of public schools” and to “make such provisions by taxation or otherwise as will secure a thorough and efficient system of public schools throughout the state.” The Minnesota Supreme Court has recognized a fundamental right to an adequate education, Skeen v. State, 505 N.W.2d 299 (Minn. 1993), and has held that claims that the State is failing to provide one can be decided by the courts, Cruz-Guzman v. State, 916 N.W.2d 1 (Minn. 2018). The constitution does not provide merely for a system to expose what we are not doing. It demands that the legislature and the governor take action to provide students with an adequate education that meets state standards.

Would more districts be worth collecting? Yes. These seven cover about 31% of Black test-takers statewide. Collecting this data is time-consuming because the Minnesota report card does not make collecting comparative data easy. Other groups deserve a similar analysis.

DATA AND SOURCES

• Proficiency: Minnesota Report Card, 2026 Reading MCA-IV, all grades, downloaded by Gerald Von Korff (Reading.xlsx). Percent proficient = Meets + Advanced.
• Black EL (derived): computed by subtracting the Black non-EL counts from the all-Black counts. These numbers are derived from the Report Card.
• Demographics: MDE enrollment public file 2026 (October 1, 2025 counts), district level, all grades. These are the same figures the Report Card shows on its demographics pages.
• Correlations: calculated across the six traditional districts; HGA is excluded because it has too few White students. With six data points they show direction, not statistical significance.
• Difference from MDE's assessment file: Report Card counts run slightly below MDE's Data Center file. For example, Minneapolis Black students are 3,148 tested and 13.9% proficient on the Report Card, against 3,213 and 15.7% in the Data Center file. The Report Card probably shows the accountability population by default. The same setting should be used for every district collected.
• Special education adjustment: statewide 2026 Reading MCA-IV results for all Black students, Black students not in special education and Black non-EL students (Reading.xlsx, State sheet); special education figures derived by subtraction. HGA’s 2.1% special education rate is from the enrollment file (all students). The estimate is approximate; see that section for assumptions.

Minnesota's Increased Compensatory Funding Must be Accompanied by Robust State Supportive Accountability

The legislature has finally implemented significant compensatory funding increases to take effect in 2026 and 2027. But without major systemic improvements to assure effective use of those funds, the increased funding will fail to make adequate improvements in educational results. My last post described what the Minnesota Legislature is doing to increase compensatory revenue. This post is about what it is not yet doing. Minnesota has no effective system to make sure that more compensatory money turns into better teaching and learning for the students who generate it.

Too many low income students, too many English language learners, and too many students of color are being failed by the current system. Recent history illustrates the need for more robust state accountability for proper use of state funding. Our public school districts are largely free of fraud: but it has become increasingly recognized that when the state creates a supportive infrastructure and accountability, significant educational improvements may follow. Under what I call Minnesota’s radical local option approach, the state largely abdicates its responsibility for delivering the adequate education that the constitution requires. How the money is used, and whether it works, is treated as almost entirely a local decision. Compensatory education has some statutory limits, but there is no meaningful mechanism to enforce those limits. And, there are powerful forces at the local level that dilute the maximum benefit of this new money. Advocates for students who are advantaged have outsized power in many districts. The collective bargaining process tends to support distributing new funds to all employees equally, and to translate new funding to increased compensation to all employees, whether or not they serve compensatory-eligible students, instead of buying additional staff and new programs.

Minnesota’s radical local control system is unconstitutional and ineffective for the students who need education the most. The Minnesota Constitution does not allow the state to step aside. It makes a thorough and efficient system of public schools the Legislature’s duty. Unless the Legislature pairs a full, robust increase in compensatory funding with systemic and supportive accountability, these students will continue to be denied an adequate education and Minnesota’s violation of the constitution will persist. The 2027 compensatory education funding reforms, and the task force recommendations, present a genuine opportunity for Minnesota to fix our broken system.

A real increase, with three contingencies

If the Legislature and the new governor fully fund the 2027 compensatory education legislation, districts serving low-income students will see a significant improvement in compensatory funding. But whether that improvement reaches students depends on three things.

1. Appropriation. The Legislature can decline to appropriate the authorized amount. A formula on paper buys nothing.
2. Dilution. A variety of local district practices can shrink the share of the money that actually benefits the students who generate it. I describe three of them below.
3. Effectiveness. Even money spent directly on the targeted students can be spent on practices that do not work.

The Legislature controls the first contingency directly. The last two are where Minnesota has chosen to look away.

Progressive on paper, because of two cities

Minnesota’s reputation for progressive school funding rests largely on the extra funding Minneapolis and St. Paul from local property tax referendum revenue. That is the central finding of Bruce Baker’s new analysis, Minnesota’s Equal Educational Opportunity Problem (October 2026).

In national rankings, Minnesota placed 5th of 50 states in 2024 for the progressiveness of state and local revenue. However, Baker reran the numbers without Minneapolis and St. Paul, because those two cities have very high local referendum support. Including Minneapolis and St. Paul, the “average district” with 30 percent child poverty receives 35 percent more state and local revenue per pupil than a district with no poverty. Without Minneapolis and St. Paul, the advantage computed for the other districts falls to 9 percent. Across 2009 to 2024, the two cities account for roughly three-quarters of the state’s progressiveness. The rest of the state falls way short of Minnesota’s reputation for progressive funding.

The cause is the property tax referendum system. State aid is modestly progressive everywhere. But high-poverty districts outside the two cities raise $2,784 less per pupil in local revenue than the lowest-poverty districts, which cancels the state’s extra aid almost exactly. Minneapolis and St. Paul voters have approved generous operating levies. Much of outstate Minnesota cannot match them, especially the districts serving high rates of poverty and non-white students.

My home district, St. Cloud, shows what that means for real students. In Baker’s 2024 data, St. Cloud was 70 percent free and reduced-price lunch eligible, and 40 percent Black. In the test year, it spent $17,140 per pupil, about $3,200 more than neighboring Sartell-St. Stephen. But St. Cloud spent only 55 percent of what Baker’s cost model estimates it would need to reach national-average outcomes. Sartell-St. Stephen spent 120 percent. In other words, Sartell had more money than it needed to acheive national aerage outcomes. Although St. Cloud spends more than Sartell, St. Cloud is far less adequately funded, because its students need more, a problem that is exacerbated because the District is not using referendum supported funding. (Keep in mind that Baker’s national-average-outcomes test is a very low bar, far lower than MCA or NAEP proficiency levels, and well under Minnesota’s constitutional test.)

That is the context for compensatory revenue. Outside the two cities, it is one of the few tools the state has to direct money to need without relying on local voters.

Compensatory money is now growing much faster than the basic formula

Until recently, compensatory revenue grew at about the same rate as the basic formula. From FY2023 to FY2025 the basic formula allowance rose about 6 percent, and compensatory revenue per pupil at the top of the scale rose about 7 percent. That kept existing programs running. It did not buy new ones.

FY2025 to FY2027 breaks that pattern. Over those two years the basic formula allowance rises about 5.5 percent. Compensatory revenue per compensatory pupil will rise 44 percent in buildings at or below 80 percent concentration, and up to 79 percent at the top.

	FY2025	FY2027 (current law)	Increase
Basic formula allowance, per pupil	$7,281	$7,683	5.5%
Compensatory revenue per compensatory pupil, 100% concentration	$3,865	$6,936	79%
Compensatory revenue per compensatory pupil, 80% concentration	$3,865	$5,549	44%

Consider a hypothetical high-poverty building of 100 students, with 80 eligible for free lunch and 20 for reduced-price lunch. Its compensatory revenue rises from about $347,900 in FY2025 to about $561,800 in FY2027. That is about $214,000 more, or roughly $2,100 per eligible student, a 62 percent increase. Under the Task Force proposal, which would count reduced-price students fully, the increase over FY2025 would be about $346,000, or roughly $3,500 per student.

Those amounts are way larger, if fully funded, than in previous years. The current-law increase equals about 28 percent of the basic formula allowance; the Task Force recommendation would increase about 45 percent. In a building of four classrooms, $214,000 to $346,000 could pay for two or three additional interventionists, or several well-trained paraprofessionals, or high-dosage tutoring for every student with money left for coaching.

(This example assumes the building’s eligible-student count holds steady. In buildings where counts fell after the shift to universal meals and direct certification, part of the higher rate only offsets lower counts.)

So the question this post asks is simple. Will that money buy more high quality staff and more effective programming for these students? Nothing in Minnesota’s current system requires that it does.

Money matters when it is used well

The research is strong that extra funding, used persistently and reliably for effective practices, improves student achievement. Bruce Baker and Drew Knight’s 2025 review for the Albert Shanker Institute, Does Money Matter in Education?, summarizes it. Funding increases improve outcomes and cuts reduce them. And money matters more, often several times more, for children in poverty and in communities where states have historically underinvested.

Linda Darling-Hammond reaches the same conclusion from the states that have actually improved. States that built lasting success did it through patient, systemic investment, she writes: funding schools based on student need, preparing and supporting teachers seriously, and building coherent instructional systems rather than chasing single reforms.

The words used well carry the weight. Money alone is not a lever. It pays for the levers.

The potential is there; the results are not

Minnesota’s low-income students have tremendous potential. Schools that serve them well prove it. But statewide, Minnesota districts are largely failing to realize that potential.

• Minnesota’s low-income 4th graders fell from 27th of 50 states in NAEP reading in 2013 to 46th in 2022 (Baker, 2026).
• Minnesota’s income-adjusted achievement gaps rank among the five widest in the nation (Baker, 2026).
• The Office of the Legislative Auditor found in 2022 that Minnesota’s achievement gaps are some of the largest in the nation.
• In 2025, only 32.8 percent of Minnesota students eligible for free or reduced-price meals met grade-level standards in reading on the MCA, and only 26.4 percent in math. Statewide, 49.5 percent of all students met the reading standard and 45.0 percent the math standard.

Minnesota’s long record of weak accountability

Minnesota has never had a serious system for ensuring that compensatory money is used effectively. The state’s own auditor has said so twice.

The 2020 compensatory revenue evaluation. The Office of the Legislative Auditor (OLA) found that schools use compensatory revenue for a broad range of programs, but its statewide impacts are unknown. For 80 percent of the revenue, no data showed how spending lined up with the uses the law allows. Forty-two percent of surveyed districts did not know how many students their compensatory programs served. Some superintendents told OLA that because compensatory revenue frees up general fund dollars to spend elsewhere, potentially all students benefit. That is a description of supplanting.

OLA also suggested -- without any foundation -- that requiring districts to prove compensatory revenue raised achievement was unrealistic. It recommended a substitute: districts should report whether their compensatory programs follow best practices. The Legislature adopted that idea in its weakest form. Districts now self-report best-practice consistency, but apparently no one is assigned to review the reports, and nothing happens to a district that reports poor practice. This issue applies to both traditional public schools and charters.

The 2022 achievement gap evaluation. OLA examined the Department of Education’s role under the World’s Best Workforce law, the state’s main accountability framework. It found that the department had not annually monitored district progress, as the statute required. It had not listed the districts that failed to meet their goals in its reports to the Legislature. The statute gave the department authority to direct up to 2 percent of a failing district’s general education revenue toward improvement strategies. At the time, the department had used it once, in 2018. Superintendents called the reporting a “checkbox activity.” I believe that the current leadership at the Department of Education favors increased accountability, but there is no support at the legislature, in the Governor’s office, or in the Attorney General’s office for real accountability, despite the constitutional requirement of a thorough and efficient system.

The 2026 Compensatory Revenue Task Force failed to recognize the need for supportive accountability. The Task Force—discussed in the first post in this series—had a chance to propose a fix and declined. Its main accountability recommendation is a short narrative in each district’s annual report explaining how compensatory money is spent, plus an MDE summary of “promising practices.” It incorrectly said measuring effectiveness was not feasible and not its role. It recommended no outcome measures, no targets, no state review, and no consequences. The result will be more funding without a corresponding increase in educational improvement.

Three local practices that blunt compensatory funding

1. Bargaining away the increase. Districts and unions typically treat all new revenue, compensatory increases included, as one pool from which settlements are negotiated. When compensatory funding grows at roughly the rate of the basic formula, that is ordinary cost growth. If used entirely to raise everyone’s salary, the district is then staffed exactly as before and delivers the same programs as before, at a higher price.

Adequate compensation is important to attract and reward quality teaching, but overwhelming evidence supports the conclusion that merely increasing compensation will not solve Minnesota’s dismal results for the students who generate compensatory and ELL funding. Delivering an adequate education requires fair compensation for staff but it also requires robust growth in the quantity of staff serving those students along with robust improvements in effective practices. If compensatory funding grows many times faster, as it will from FY2025 to FY2027, absorbing it into across-the-board compensation would pervert the purpose of compensatory funding.

If we want a payoff for the extra compensatory funding, the extra increases must then be allocated to the students who generate it and that funding must translate into major improvements in the delivery of education.

Massachusetts offers a warning. After its 2019 Student Opportunity Act, the ten districts with the largest aid increases raised teacher spending by $156 million over three years. Their teacher headcount rose only 7 percent, or 751 teachers. The Massachusetts Taxpayers Foundation asserted that most of the new money supported salary increases rather than new hiring and reforms implementing effective practices.

2. Supplanting. Supplanting means using targeted money to replace spending the district would otherwise make from its general fund, rather than adding to total spending for the target students. Federal Title I has long carried a “supplement, not supplant” rule, and a comparability test so that high-poverty schools get their fair share of base funding before Title I is added.

However, Minnesota has no comparable mechanism. Although its statute restricts what compensatory dollars may be coded to, it does not define a baseline, require maintenance of effort, or bar a district from cutting a building’s general fund allocation by the amount of its compensatory revenue. It appears that a district can comply fully and still let compensatory money carry costs that basic revenue used to carry.

When supplanting occurs, the result is that compensatory money does not improve programs for the target students. It merely reduces the basic funding that supports them. Administrators sometimes say compensatory money “buys” teachers because without it they would have laid people off. That claim concedes the point: the money is doing the work the basic formula was supposed to do.

3. Diversion. Minnesota law expressly allows districts to spread compensatory revenue away from the buildings that generate it. Ordinarily at least 80 percent must go to the generating buildings, and up to 20 percent may be reallocated under a school board plan. For fiscal years 2026, 2027, and 2028, the Legislature has raised the reallocation limit to 40 percent. Reallocated money may serve students in any grade, in any building.

Diversion dilutes the impact precisely where the formula concentrates money most heavily. The current formula sends the most money per pupil to the highest-poverty buildings. Allowing districts to move 40 percent of it elsewhere works against that design.

Abdication has a political cost and a constitutional one

If Minnesota refuses to take responsibility at the state level to assure that compensatory money is used, that will ultimately undermine support for the money itself. Legislators who vote for a large increase will be asked what it bought. If the honest answer is “we don’t know,” or continuation of the same programs at a higher cost, the next increase will be harder to win, and the current one easier to cut.

Abdicating state responsibility for delivery of an adequate education also violates the Constitution. Article XIII, section 1 makes it the Legislature’s duty to establish “a general and uniform system of public schools” and to “secure a thorough and efficient system of public schools throughout the state.” In Cruz-Guzman v. State (2018), the Minnesota Supreme Court held that the clause’s adequacy guarantee has a qualitative component, and that claims under it are for the courts to hear.

That duty belongs to the state. The Legislature may delegate the running of schools to local boards. It cannot delegate away its responsibility for the result. A system in which the state sends targeted money to districts, asks nothing about whether it reaches the targeted students, and does nothing when it does not, is neither uniform nor thorough and efficient.

There is one area of K-12 education that has robust accountability, and that is special education. When a school district fails to provide special education that meets all state standards, it may be subject to state audits, administrative intervention and administrative appeals by parents. The rationale is that special education students come to school with special needs, and they deserve an adequate education which otherwise would not be met.

But other students, disproportionately lower income students, English language learners and students of color, come to school with disadvantages as well. There is no principled reason that meeting their needs should be a local option. I don’t suggest that the solution is to create the elaborate enforcement system that exists for special education students. The state has an obligation to implement supportive accountability systems to assure that they receive the adequate education the constitution requires and it is time to address how the state is going to meet that responsibility.

What other states are trying

A number of states are now beginning to pair increased funding for high-need students with state planning, review, and support. It remains to be seen whether these states will implement these concepts effectively. Massachusetts requires district plans under its Student Opportunity Act and reviews them at the state level. Maryland created an independent review board. Tennessee reviews district progress each year. California assigns “differentiated assistance” to districts whose student groups are struggling. The national education nonprofit Bellwether has drawn these approaches together in a framework for state fiscal accountability, Beyond the Bottom Line (May 2025). Its premise is that money alone does not improve student achievement, but how it is used can. The framework has four parts: sound basic fiscal rules; district spending plans tied to academic goals; transparent spending and outcome data; and state capacity to support districts, with tiered help and intervention for those that struggle. Bellwether notes that most states have built academic accountability systems but not fiscal ones. It cites Minnesota’s compensatory revenue as an example of a “light-touch” approach: one that is extraordinarily lenient for districts that are failing to make adequate progress.

The movement to implement robust state accountability and support systems is a new trend, so no state can yet show proven results from pairing compensatory funding with accountability. The early evidence mostly shows how hard it is. Massachusetts could tie only 59 percent of its new reform-related aid to planned evidence-based programs, and only 25 percent of its total aid increase, because district plans did not match financial reports.

What Maryland is attempting. Compare Maryland’s Blueprint for Maryland’s Future. An independent Accountability and Implementation Board reviews and approves every district’s implementation plan, tracks spending to confirm required funding reaches the intended students, and can withhold funds. Its record is mixed: districts met only two of five FY2025 implementation goals, and the board recently paused its school-visit teams. An independent evaluation is due to the governor and General Assembly in January 2027. But Maryland has built the machinery to ask whether the money is working. Minnesota has not.

The strongest example comes from a different direction: a state that made systemic improvement in one subject a state responsibility with a focus on reading. That state is Mississippi.

In her March 2026 article Improving Student Achievement: What Red and Blue States Are Doing Right, Linda Darling-Hammond describes what Mississippi did. It is often summarized as a switch to phonics. She shows it was far more:

• A state-defined literacy approach. The state set out a research-based literacy block: explicit daily instruction in foundational skills, plus daily writing, reading and discussing books, vocabulary, and comprehension.
• Staffing to make it work. Kindergarten and first-grade classrooms of up to 24 students are expected to include trained teaching assistants, so teachers can spend most of their time with small groups.
• Assessment and intervention. Students are regularly assessed, and specific interventions are put in place for those who need them.
• State capacity. The department of education created a literacy division and sends trained literacy coaches to high-need schools.
• Sustained money. Per-pupil spending rose 73 percent from 2016-17 to 2025-26, with teacher raises in 2022 and again last year, and an 18 percent raise for teaching assistants.

The result: Mississippi ranked 46th in 4th-grade reading in 2006 and reached the national average by 2019. In 2024 it ranked first in the nation on demographically adjusted 4th- and 8th-grade reading and math scores. Both rankings are based on the National Assessment of Educational Progress (NAEP), the federal test given to samples of students in every state, which Darling-Hammond calls the nation’s most reliable long-term measure of achievement. The 2024 ranking uses an Urban Institute analysis that adjusts each state’s NAEP scores for student demographics, such as poverty, English learner status, and disability. That adjustment lets states serving very different populations be compared fairly. It does not change how students actually scored. On unadjusted 2024 scores, Mississippi still ranked 35th in 8th-grade math and 41st in 8th-grade reading. Mississippi is not yet a top performer. But its students outperform what their demographics would predict by more than any other state’s, and their results are improving significantly.

Mississippi is beginning to implement a system of both support and accountability. The state defined what effective practice looks like, paid for it, built its own capacity to support it, and watched whether it worked. While Minnesota has a poorly funded program for the very lowest performing schools, Minnesota lacks systemic, supportive accountability.

This is a critcal time form Minnesota to reconsider its abdication of state responsibility for support and accountability. If actually funded by the 2027 legislature, Minnesota is about to make perhaps the largest increase in compensatory funding in its history. If the Legislature does not pair it with that kind of state responsibility, the increase will be absorbed, and the students who generate it will keep waiting, and opponents will charge that Minnesota has shown that increasing funding does not make a difference.

Sources

• Bruce D. Baker, Minnesota’s Equal Educational Opportunity Problem, policy brief, and accompanying slide deck (Oct. 2026).
• Office of the Legislative Auditor, Compensatory Education Revenue (March 2020), summary and p. 23.
• Office of the Legislative Auditor, Minnesota Department of Education’s Role in Addressing the Achievement Gap (March 2022), pp. 28–30.
• Minn. Stat. § 126C.15; Laws 2026, ch. 117.
• Laws 2025, 1st Spec. Sess., ch. 10, art. 1, §§ 19, 27.
• Minnesota Department of Education, Inflation Adjusted Formula Allowance for Fiscal Year 2027 (Feb. 11, 2026).
• Massachusetts Taxpayers Foundation, SOA Implementation: A 3-Year Progress Report (Nov. 2025).
• Bellwether, Beyond the Bottom Line: A New Framework for K-12 Fiscal Accountability (May 2025) and Splitting the Bill #21: How Should States Implement K-12 Funding Changes? (Jan. 2026).
• Linda Darling-Hammond, Improving Student Achievement: What Red and Blue States Are Doing Right, Learning Policy Institute (Mar. 4, 2026).
• Maryland Department of Legislative Services, FY2027 budget analysis of the Accountability and Implementation Board.
• Bemidji Pioneer, “Bemidji Area Schools outperforms state in math MCA, underperforms in reading” (Sept. 2025), for 2025 statewide free/reduced-price MCA figures.
• Opportunity for All Kids, “Majority of Minnesota Students Still Below Grade-Level in Reading and Math” (Sept. 23, 2025), for 2025 statewide MCA figures.

The New K-12 Compensatory Revenue Task Force's final report--Part 1

Part 1 of a series on the K-12 Compensatory Revenue Task Force's final report

In October 2026, the Compensatory Revenue Task Force sent its final report to the Legislature. Compensatory revenue is the state's principal funding stream for students who arrive at school underprepared to learn, so how it works matters a great deal. This first post explains what compensatory revenue is, how it works, and what the task force recommended. Later posts will take up the policy questions the report raises, and in some cases leaves open.

What is compensatory revenue?

Compensatory revenue is a component of Minnesota's general education revenue. Its statutory purpose is to meet the educational needs of students who enroll underprepared to learn and whose progress toward state or local standards is below the level appropriate for their age. The theory is simple. Some students need more instructional time, more individual attention, and more support than the basic per-pupil allowance can buy, so the state provides additional dollars where those students are enrolled.

Minnesota has never tried to measure "underpreparedness" directly. It uses poverty as a proxy. For decades, the proxy was eligibility for free or reduced-price school meals.

How the money is generated

Compensatory revenue is calculated school building by school building, not district-wide. Each site's revenue depends on two things: how many of its students qualify, and what share of its total enrollment those students represent.

The second factor is the concentration feature, and it is central to the formula's design. A school where 80 percent of the students are in poverty generates more per qualifying student than a school where 20 percent are. The premise, well supported in the research, is that concentrated poverty compounds educational need. A low-income child surrounded by classmates facing the same disadvantages needs more support than a low-income child in a more advantaged school.

Through fiscal year 2026, the formula limited that concentration effect in two ways. A building's weighting stopped rising once 80 percent of its students qualified. The result was then multiplied by 0.60. Even at the highest-poverty schools, a qualifying student generated only about half of the basic per-pupil formula allowance in additional funding.

Beginning in fiscal year 2027, a formula enacted in 2023 took effect, and it works very differently (Minn. Stat. § 126C.10, subd. 3). It has three pieces:

• A building's "compensatory pupils" equal its free-meal students plus one-half of its reduced-price students.
• Its "concentration factor" is simply the ratio of compensatory pupils to total enrollment.
• Its revenue equals compensatory pupils times the concentration factor times a statewide compensatory allowance of $6,936 for FY2027.

There is no longer an 80 percent ceiling or a 0.60 multiplier. Per-pupil funding rises in a straight line all the way from 0 to 100 percent concentration.

Researchers commonly express the additional funding for a disadvantaged student as a "weight" relative to the basic per-pupil allowance. A weight of 1.0 means the student generates an extra amount equal to the basic allowance, so twice the base in total. Under the current formula, each building's weight depends entirely on its concentration. Measured against the FY2027 basic formula allowance of $7,683, the results look like this:

Building concentration	Additional revenue per compensatory pupil	As a weight of the basic formula
100%	$6,936	about 0.90
88%	$6,104	about 0.79
60%	$4,162	about 0.54
40%	$2,774	about 0.36
20%	$1,387	about 0.18

Sources: Minn. Stat. § 126C.10, subds. 3, 3a, 3c; Minnesota Department of Education, FY2027 formula allowance memo (Feb. 11, 2026).

These figures are before any adjustment under the statewide funding floor. State law requires that compensatory revenue total at least $857.2 million statewide. If the formula adds up to less than that, the remaining money is distributed to every building in proportion to its formula amount. In that case, each building receives somewhat more than the figures shown in the table, and the formula determines only how the $857.2 million is divided.

The formula pays the most to schools with the highest concentrations of poverty, and it pays them considerably more than the old formula did. A low-income student in a school where few classmates are poor generates only a small fraction of the basic allowance. Because a building's total revenue grows with the square of its concentration, the money is heavily concentrated in a relatively small number of buildings.

How students are counted

The method of counting students has been unstable, and that instability is part of what led to the task force.

Originally, students were counted through paper applications for educational benefits, the familiar free and reduced-price lunch forms. Starting in 2008–09, students were also identified automatically through "direct certification," a match against enrollment in SNAP, MFIP, and foster care. Medicaid was added in 2022–23.

When Minnesota adopted universal free school meals in 2023, families had little reason to fill out the paper forms. The Legislature removed the forms from the compensatory count and moved to direct certification only. Student counts, and district revenue projections, became volatile. The Legislature responded with a series of temporary fixes:

• hold-harmless provisions for fiscal years 2025 and 2026;
• a statewide funding floor;
• a one-time FY2027 cushion for buildings that would lose revenue under the new formula.

How the money must be spent

Compensatory revenue is restricted to specified uses, including:

• remedial instruction;
• additional teachers and aides;
• extended day and summer programs;
• counseling and social work;
• programs for English learners;
• early childhood programs;
• certain professional development.

Because the money is generated by particular schools, the law has historically required districts to send at least 80 percent of each building's compensatory revenue back to that building. The school board could reallocate the other 20 percent. For fiscal years 2026 through 2028, the Legislature temporarily loosened that rule, allowing districts to reallocate up to 40 percent. At present, then, only 60 percent of the money generated by a high-poverty school is guaranteed to be spent there.

What the task force recommended

The 2025 Legislature created the 14-member task force and charged it with examining the formula's purpose, revenue levels, distribution, uses, and evaluation. It met 13 times between September 2025 and October 2026. Its principal recommendations are these.

Target and proxy. Students underprepared to learn should remain the intended beneficiaries, and poverty should remain the proxy for identifying them. The task force acknowledged that the proxy is imperfect but found a strong correlation between poverty and learning readiness.

Counting students. Count as many eligible students as possible. That means combining direct certification (now including FDPIR, migrant, homeless and runaway youth, and Medicaid), restoring the educational benefits forms, and adding SUN Bucks applications. Over the longer term, the state should add income tax data, as New Mexico has done, to reduce dependence on federal program enrollment.

Equal weighting. Count free-meal and reduced-price students equally. The task force concluded that both income levels reflect substantial hardship and that the current half-weight for reduced-price students reflects budget considerations rather than real differences in need. This is among the largest, and most expensive, of the task force's recommendations.

Stability. Beginning in fiscal year 2028, use a four-year rolling average of student counts to reduce volatility.

Concentration. Keep the concentration formula, with per-pupil funding increasing continuously from 0 to 100 percent concentration. This retains the structure of current law. The task force first proposed reinstating a cap at 80 percent, then reversed itself after reviewing fiscal modeling.

Site allocation. Require at least 70 percent of a building's compensatory revenue to stay at that building. Over the longer term, give districts below median enrollment more flexibility, with documentation and public reporting.

Extended time and uses. Make no changes.

Effectiveness. Do not attempt to measure outcomes directly. Instead, require districts to describe their compensatory spending in their Comprehensive Achievement and Civic Readiness (CACR) reports, and have MDE compile an annual statewide report identifying promising practices.

Finally, the task force urged the Legislature to fund its recommendations fully. It warned against across-the-board proration, which it found would shortchange the highest-need schools. If full funding is not possible, it proposed an order for scaling back:

1. Phase in the equal weighting for reduced-price students.
2. Adjust the averaging period.
3. Adjust concentration floors or caps.
4. Only as a last resort, prorate the formula along a non-linear curve that protects the highest-need schools.

What would it cost?

The report does not say. That is a striking omission in a document that asks the Legislature to fully fund its recommendations. The report acknowledges that MDE's modeling showed the recommendations increase spending, both by identifying more students and by raising concentration percentages. It never puts a number on the increase.

According to one task force member, the full package would add nearly $500 million a year. Measured against the current statewide floor of about $857 million, that is an increase of more than 50 percent. Whatever one thinks of the merits, that figure belongs in front of legislators and the public. It is also the reason the task force spent so much effort on what should happen if the Legislature does not provide it.

The same task force member acknowledges that leaving the full price out of the report is a fair criticism, and offers an explanation. MDE plans to produce official cost estimates after the November forecast, when it will have a clearer picture of enrollment and of the number of students who qualify. The recommendations themselves make forecasting harder at first: averaging student counts, which the task force recommends for the first time, complicates long-range projections. The task force is expected to present its work to the House and Senate education finance committees this spring, where the cost question will have to be answered with better data than exists today. I will report MDE's figures when they are released.

The policy issues ahead

The report is a serious effort to repair a formula destabilized by the shift to universal meals and direct certification. It also leaves several important questions unresolved.

1. How much is enough? The report never asks whether the amount of compensatory funding is adequate to meet the needs of low-income students. The research literature has addressed that question directly. Under the current formula, only students in the very highest-poverty buildings approach a weight of 1.0. A low-income student in a building at 40 percent concentration generates a weight of about 0.36, and at 20 percent concentration, under 0.2. Whether those amounts are adequate is a question the task force did not take up.
2. Who pays if the Legislature doesn't? With a price tag that may approach half a billion dollars, and no official estimate until after the November forecast, partial funding is a real possibility. The task force's own analysis shows that partial implementation can harm the highest-need schools.
3. Redistribution. Several recommendations, especially restoring the forms and equalizing reduced-price weighting, add students mainly in low- and moderate-poverty schools. The report itself notes that high-concentration schools gain less from these changes. If the total does not grow enough, money shifts away from the schools with the greatest need.
4. English learners. The report treats English learners only as background. It does not examine whether direct certification and tax data undercount immigrant and EL families, or how compensatory revenue interacts with the state's separate EL funding.
5. Does the money reach the students who generate it? The current formula concentrates revenue heavily in the highest-poverty buildings, so the rules on where the money is actually spent matter more than ever. Under current law, districts may move up to 40 percent of it elsewhere. Even the 80, 70, or 60 percent site rule may matter less than it appears. As one task force member candidly put it, districts can offset compensatory dollars by reducing a building's general-fund allocation. The report does not consider a comparability or supplement-not-supplant requirement.
6. Accountability. The task force's effectiveness recommendation is a narrative disclosure. It largely duplicates best-practice reporting duties already in statute, and it attaches no consequences to spending that shows no results.

In the next post, I will take up several of these issues, beginning with the question the task force set aside: how much additional funding Minnesota's low-income students actually need, and how close the compensatory formula comes to providing it.